Answer this Question on the basis of the following diagram for a monopolisticall
ID: 1107341 • Letter: A
Question
Answer this Question on the basis of the following diagram for a monopolistically competitive firm in short-run equilibrium.
If the firm found itself producing 23 units of its product, it would be
Question 17 options:
overproducing, and as a result would decrease its production until MC = MR
underproducing, and as a result would increase its production until MC = D
underproducing, and as a result would increase its production until ATC = D
overproducing, and as a result would decrease its production until MC = ATC
A)overproducing, and as a result would decrease its production until MC = MR
B)underproducing, and as a result would increase its production until MC = D
C)underproducing, and as a result would increase its production until ATC = D
D)overproducing, and as a result would decrease its production until MC = ATC
Explanation / Answer
Answer
Option A
overproducing, and as a result, would decrease its production until MC = MR
The firm is monopolistic firm which produces MR=MC
and the given quantity where MC>MR
so the firm should decrease the output up to the MR=MC
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